BPA’s 2012 Integrated Program Review—Request for Discussion Topics and Programs; Request for Comments on Spending Levels

The following comments were submitted in response to the open comment period described below.

This comment period has two phases: * June 5-June 29, 2012 - Parties request specific discussion topics for meetings to be held the week of July 16-19, 2012. * June 5-Aug. 10, 2012 - Parties comment on BPA programs and associated spending estimates.

BPA kicked off its 2012 Integrated Program Review June 5, 2012, to provide the region an opportunity to engage in a rigorous review of BPA’s programs, their values, goals and costs.

The Initial IPR Publication, posted at the Website listed below, describes programs the agency has developed to deliver on an efficient and reliable power and transmission system, and to provide expected and required services. BPA encourages participants to review the Initial IPR Publication and comment on the agency’s programs and proposed IPR spending levels and cost targets.

Comments are numbered consecutively as they are received. Breaks in the number sequence result when comments are deleted because they
were submitted in error or have inappropriate content (such as SPAM). If you do not see your comment two business days after
you submit it, please contact (800) 622-4519.

Close of comment: 8/10/2012

IPR212 0006 -
PaceFor purposes of establishing jurisdictional authority and consistent with the Supreme Court’s definition in Bennett v. Spears, 520 U.S. 154 (1997), Bonneville should clarify that, upon closeout of the 2012 Integrated Program Review process, the determination of capital and expense spending levels for FY 2013-2015 will represent a “final action” under section 9(e)(3) of the Northwest Power Act.

IPR212 0009 -
Iverson/CBFWAThank you for the opportunity to suggest the following three topics for further discussion at the July IPR meetings. 1) From the IPR support materials, it is not clear what the total cost for BPA overhead is within the total Integrated Fish and Wildlife Program. In the supplemental meetings in July, would it be possible for BPA staff to present BPA F&W Division overhead, actual and projected costs, from 2008 through 2017 (number of FTEs, total budget amount, and total amount under contract for direct support of Division staff). It would also be helpful to see a comprehensive organizational chart for the F&W Division. 2) It is clear from the IPR support materials that spending did not occur as planned for the 2008 Fish Accords in FY2010-11. It is also clear that the spending (work) was moved forward, as per the Accords, into the current rate period. What is not clear is that the BP-12 rate decision resulted in collecting funds to support the Accord spending, yet it appears that no actual funding has been “carried forward” to support the unfinished work as stated in the support materials. With the addition of $10 million in estuary spending, it appears that non-Accord projects in the Integrated Fish and Wildlife Program will have to be reduced or eliminated in order to fund the Fish Accord projects - based on the proposed BP-14 funding levels. An up to date accounting of the Fish Accords FY2008-2011 planned and actual spending would be useful in reviewing and evaluating the BP-14 rate drivers. 3) At the IPR meeting, BPA staff referred to a “mature” Integrated Fish and Wildlife Program. This implies that the Program is fully developed and meeting its mitigation obligations. It would be helpful if BPA staff could present how future unmet resident fish and wildlife obligations will be addressed if funding levels are not going to increase and Accord obligations are going to be fully met through 2017. Has BPA performed an analysis to estimate potential outstanding resident fish and wildlife obligations? If you have questions or require clarification please call me at 503-229-0191.

IPR212 0014 -
PaceI have reviewed and join the comment/request from John Saven, CEO of the Northwest Requirements Utilities, IPR212 008, regarding the need for Bonneville to provide additional information and schedule technical discussions of the following: (1) significant increases proposed for the Army Corps of Engineers and Bureau of Reclamation costs including, but not limited to, expenses related to operation of the Grand Coulee, John Day and Bonneville projects; and (2) the budget for fish and wildlife programs, which are provided in section 3.7 of the IPR Initial proposal, pages 43-48, and, as noted on page 3 of the Initial IPR Publication, are subject to a “great deal of uncertainty pertaining to future court actions.” In addition, I request that Bonneville provide additional information and schedule a discussion regarding the target cost levels and amounts proposed for compensation and expenses of the Northwest Power and Conservation Council presented in section 3.8 of the June 2012 Integrated Program Review Initial Publication. See 2012 Integrated Program Review Initial Publication (June 2012), 50-53. Among other things, the technical discussion of target/proposed levels requested should address the following: (1) sections 4(c)(10)(A) and (B) of the Northwest Power Act, which limit the amount the Administrator may provide for the Council’s compensation and expenses to no more than 0.10 mill multiplied by the kilowatt hours of firm power forecasts to be sold by the Administrator during the year to be funded; (2) the Administrator’s forecasts of firm power sales provided in Table A-22 of the Technical Appendix to Bonneville’s 2011 “Whitebook”; (3) the Administrator’s final record of decision for the 2011 Residential Exchange Program settlement agreement; (4) the “three year agreement” alluded to on page 52 of the IPR Initial proposal; (5) the “Power Function Review workshops” held March 6 and 8 of 2006; and (6) the proposed interpretation of section 49(c)(10)(B) and methodology Bonneville issued June 15, 2006. See: http://www.bpa.gov/power/pgp/whitebook/2011/WhiteBook2011_TechnicalAppendix_Vol%201_Final.pdf.; https://www.bpa.gov/secure/RateCase/openfile.aspx?fileName=REP-12-E-BPA-11.pdf&contentType=application%2fpdf.; http://www.bpa.gov/power/pl/review/meetings.shtml; http://www.bpa.gov/power/pl/review/03-06-2006_workshop_agenda.pdf; http://www.bpa.gov/power/queue/review/03-06-2006_Workshop/Mar%206%20Tech%20Workshop%20Packet.pdf; and http://www.bpa.gov/corporate/pubs/RODS/2006/Final_Interpretation.pdf.

IPR212 0017 -
Sullivan/United Community Action NetworkUnited Community Action Network (UCAN) is writing to support the request for a $5 million increase in annual funding for low-income weatherization programs across BPA’s service territory. Currently,UCAN has approximately 75 households on our waitlist. At current BPA funding levels we are able to weatherize approximately 15 households annually. According to the Oregon Employment Department, the unemployment rate for Douglas County as of May 2012 is 11.8%. Families like these that have never needed our help are reaching out for help in additon to the numerous low-income families in our community. We strongly urge BPA to approve the request for an increase in funding for our programs so that we can assist additional households located in BPA territories. Thank you.

IPR212 0018 -
Miller/NeighborImpactWe have 34 BPA customers on our weatherization wait list and typically serve about 30 each year. A doubling of funding would help our community by putting more money into the local economy through our contractors, enable us to serve many more people and would help some of our most vulnerable clients in the coldest climates in Central Oregon. Central Oregon has experienced the brunt of the economic downturn with tremendous job loss and high levels of foreclosure. I want to share a success story from one of our jobs. One of our BPA weatherization clients is 84 and has lived in her mobile home for 15 years. She was recovering from a stroke, lives on a small fixed income and had high power bills which concerned her. After her weatherization by NeighborImpact she commented that she “is so amazed that there are so many kind people out in this world still that want to help and really show that it is not a bother to them to do so”. The weatherization made a huge difference in her home: when it is cold outside her home seems warmer and when it is warm outside her home seems cooler than before. She has saved energy and money since her weatherization.

IPR212 0019 -
Bennett/Lane County HSDLane County and its partner agency, Housing and Community Services Agency of Lane County (HACSA), manage and deliver the Low-Income Weatherization program in Lane County. BPA's Low-Income Weatherization funding has always been an essential funding source in Lane County. Lane County is largely served by BPA electric utilities, namely Blachly Lane Electric Cooperative, Central Lincoln Public Utility District, Emerald Peoples Utility District, Eugene Water and Electric Board, Lane Electric Cooperative and Springfield Utility Board. BPA’s Low-Income Weatherization funding has allowed Lane County and HACSA to leverage and amplify additional weatherization funding from these local utilities. With the successful completion of the federal ARRA Low-Income Weatherization grant, funding from BPA is more important than ever to low-income households. Currently HACSA has 1,771 BPA households on its waiting list. Of these, 496 have a senior household member, 477 have a disabled household member, and 345 have at least one child under the age of six. With current “post-ARRA” funding levels, Lane County and HACSA are able to serve about 250 – 275 households each year. A doubling of BPA funding would allow Lane County/HACSA to serve up to an additional 100 BPA households on an annual basis. Lane County and HACSA encourage BPA to increase the low-income weatherization budget in Oregon. This funding supports the health and well-being of Oregon’s most vulnerable residents, preserves Oregon’s affordable housing stock, and reduces Oregon’s energy footprint. Thank you for your consideration.

IPR212 0020 -
PaceIn May of 2008, Bonneville entered into “accords” with the Columbia River Inter-tribal Fish Commission (CRITFC), as well as three of the four tribes that are members of CRITFC, for the primary purpose of removing from the district court’s purview the perspectives of those tribal parties in litigation brought by the state of Oregon and a coalition of environmental groups challenging a biological opinion issued in May 2008—and a supplemental opinion issued in 2010—by NOAA Fisheries for operation of the FCRPS by the Army Corp of Engineers and the U.S. Bureau of Reclamation. Although neither CRITFC nor Bonneville are party to that litigation, entry into the accords was premised on the expectation that a commitment by the Administrator to draw down and divert approximately $1 billion from the Bonneville fund for largely unspecified expenditures for those tribes' fish and wildlife measures would be sufficient to secure the district court’s imprimatur for the "biops" and thereby overcome obvious legal deficiencies, e.g., with respect to the treatment of jeopardy and risk of extinction. As it turned out, that was not the case: in August of 2011 Judge James Redden, presiding, invalidated the 2008 and 2010 biological opinions, instructing NOAA Fisheries to submit a new biological opinion no later than January of 2014 that, inter alia, identified specific measures for protection of listed fish species, as well as considered reconfiguration (breaching) of hydro projects in the lower Snake River and securing additional water supplies, e.g., from the upper Snake River basin above the Hells Canyon complex. Contrary to the May 11, 2012, letter of invitation by Bonneville’s chief financial officer, Claudia Andrews, the amount of time allowed for the meeting regarding the fish and wildlife program—just one hour—does not provide participants in the region with any meaningful opportunity to engage in a “rigorous review” of such expenditures or discuss the “value they provide” before the spending levels are finalized in a “close-out” letter and used to develop revenue requirements for the FY 2014-2015 rate case. Rather than minimize participants’ time, the “redesigned structure” Bonneville has adopted for the integrated program review appears to be designed to thwart a rigorous review of spending and prevent a frank discussion of what value such expenditures provide from occurring in light of Judge Redden’s decision invalidating the 2008/2010 biological opinions for the FCRPS.

IPR212 0021 -
HermanEnergy efficiency is the most environmentally friendly, cost effective thing that we can do and the BPA should be supporting it wholeheartedly at every opportunity. I think it is crazy to task the utilities with this important responsibility, but that is how it's done and they have done a pretty good job. The BPA should continue to support them in any way possible and know that the vast majority of Americans want us to use less energy and more renewable energy. BPA should be listening to this and act accordingly.

IPR212 0022 -
Iverson/CBFWAThank you for the opportunity to comment on the 2012 IPR information materials. Based on the discussion during the July 17, 2012 IPR meeting to discuss fish and wildlife costs, I would like to request that BPA include Northwest Power Act Section (4)(h)(10)(C) credits in future iterations of the “river of costs” diagram presented on Slide 39 of the June 5, 2012 IPR presentation and Slide 9 of the July 17, 2012 IPR Fish and Wildlife Program presentation. Inclusion of the treasury credits that tax payers contribute to BPA’s fish and wildlife costs would better reflect BPA’s true cost of fish and wildlife actions. Tax payers contribute approximately 22.5% of the total fish and wildlife costs and to exclude this contribution unnecessarily exaggerates the cost of fish and wildlife actions to BPA customers.

IPR212 0025 -
Kulp/Community Action Team, IncCOMMUNITY ACTION TEAM, INC. “BUILDING BRIDGES TO SELF-SUFFICIENCY” August 7, 2012 BPA RE: Integrated Program Review We weatherized homes for a total of 62 electric utility customers within our three county district in 2011. This is a 38% increase over 2010 in which CAT weatherized 45 electric utility customers. Within the first fiscal month of 2012 we have 10 houses under way. The unemployment situation looks a little better but not by much. All three counties continue to see high unemployment, Clatsop at 7.5%, Columbia at 9.5% and Tillamook at 8.2% as of August 2, 2012. The poverty level rates for the counties remain in double digits, Clatsop at 12.8%, Columbia at 10.3% and Tillamook at 16.9%. Currently our wait list is comprised of 421 households of which 249 are in BPA territory. There is a very strong need for funding to assist these households. Many of the senior citizens within CAT’s service area do not turn on their furnaces because of the cost. Some who have access to free wood use unvented stoves which cause health issues and unsafe conditions. Out of 21 returned surveys on our Weatherization Program all stated that due to the work done their homes stayed warmer even on the coldest days. More important, at least 20% saw significant decrease in their utility bills. One senior citizen stated she now has $50 each month that she can put into savings! For someone earning below the poverty level that is a lot. Another client’s health improved due to the drier condition of her home after receiving insulation and furnace repair. Not only did her heating bill drop but so did her medical cost. This program accomplishes two goals; improving the lives of so many low income people and conserving energy. No doubt what is most importance to the clients are the dollar savings, improved health and warmth. But we must not forget that when we educate our clients on how to save energy, they see its importance as well. And they see it as a way for them to give back. CAT could not achieve any of this without Bonneville Power funding. Doubling the current funding level will improve more lives and conserve more energy. A win-win for all of us! Sincerely, Carmen Kulp Single Family Housing Assistant Director

IPR212 0026 -
Irvine/Northwest SEEDNorthwest Sustainable Energy for Economic Development is a nonprofit organization focused on empowering community-scale clean energy solutions in the Pacific Northwest. We have a decade of experience providing technical assistance and education to accelerate the deployment of clean energy projects, including energy efficiency and renewable energy. We work in diverse communities across the region, helping Native American tribes with energy efficiency, connecting rural agriculture producers with wind energy solutions, and orchestrating urban neighborhood purchasing programs for solar. Our on-the-ground projects have proven that investments in energy efficiency yield long term benefits to local economies both in terms of jobs created and energy dollars redirected to local spending. We are concerned that the BPA’s proposed level of funding for energy efficiency is inadequate to reach energy efficiency targets in the Sixth NW Power and Conservation Plan and it falls far short of what is needed to make our region stronger and more resilient. Specifically, the BPA should increase funding for low-income weatherization from $5 million to $10 million per year. With federal support for weatherization shrinking while demand for services is growing, the BPA would be passing up cost-effective savings if they budgeted anything less. In our experience, even with current levels of weatherization funding, the Tribes are underserved. A cut in funding for weatherization would lead to even lower levels of service and could put people out of weatherization jobs just as they have been trained up. In general, investing in energy efficiency is the least-cost, least-risk strategy for BPA and its utility customers. It helps families and businesses lower their energy bills, providing a buffer against the uncertain energy future. We urge the BPA to pursue energy efficiency more boldly, and to fully fund the commitments made under the Long Term Regional Dialogue Policy. Thank you.

IPR212 0030 -
Johnson/Oregon-Washington PSRI have two brief comments and related questions: 1)The NRC has now clearly added requirements for the CGS nuclear plant to address problems identified from the Fukushima accident. It will need to add vents to its reactor vessel. It will need to conduct a seismic survey to determine if its reactor building and spent fuel pool are sufficiently sound to withstand a worst-case local earthquake. It will need to review its back-up power systems and water-intake systems. All of this will cost money, which has been indicated in the documents supplied by Energy Northwest. I am wondering if BPA has begun to analyze how much this would cost, independently of Energy Northwest, versus the option of closing the reactor early. 2)It would be good to get an assessment of where the proposed small modular reactor fits into the long-term energy supply plan for the region. Is a small modular reactor needed to supply the power of the waste vitrification plant at Hanford? Is there value in having the vit plant be "energy self-sufficient" on the Hanford Reservation? With or without a vit plant, what would the impact be of adding another nuclear plant to the spring power mix? These are things that the BPA should consider now.

M-S-R is a Public Power Agency comprised of three publicly owned utilities who collectively buy more than 350 MW of wind power under long-term contracts from wind generation projects located in the Pacific Northwest. As such M-S-R is critically impacted by decisions made by BPA in terms of future rates, terms and conditions for integration, ancillary services, and transmission service.

BPA should identify programs and specific projects within programs by determining the most critical and urgent needs of the BPA system. Conditions are changing – capital access is constrained, reliability needs are intensifying, and external regulatory demands are placing new requirements on the BPA system. This 2012 process must take a more aggressive approach in prioritizing real and urgent needs.

It appears that BPA develops its strategic plans, budgets, and programs essentially extrapolating from prior budgets. BPA should move to developing budgets similar to how budgets are developed in other industries. Past year priorities and the associated expenditures may not be a good barometer for future year needs. Except for the most critical projects or programs, there should be no lapse factor.

M-S-R submits that the following are the highest priority of BPA and the IRP should reflect such a prioritization.

1. Grand Coulee, Keyes, and John Day repair and retrofitting. These repairs and retrofits will address both reliability and flexibility needs, both urgent and critical to BPA’s expanded obligations.

2. Transmission and System Infrastructure. The BPA system is known to have constraints. BPA has used remedial action schemes to solve problems in the past but now it may be necessary to replace some of these schemes with appropriate new facilities. Such additions however,should only be made after BPA is better able to determine the likely displacement of thermal generation by lower dispatch variable generation. Otherwise unnecessary redundancy in transmission capacity may result.

3. IT supports for system and transmission needs. The “new” world is heavily automated both for obtaining necessary information to operate the system reliably and for maximizing flexibility. This category includes IT support and new technology for system operations, power system dispatching, control center support, substation operations, engineering and system to decrease other costs of operations and maintenance. The focus should be on those improvements that enhance flexibility and reliability.

4. NERC/WECC compliance is required. Efforts should be made to minimize compliance costs where the benefits to system reliability and flexibility are uncertain.

5. The normal costs of power and transmission operations.

What is not as important? Expenditures that expand or extend the BPA system at a time when load growth is minimal and future generation expansion is uncertain need to be given lower priority. The region as a result of Order 1000A now has a formal planning process to determine where expansion is required. This process also may permit third party involvement in transmission projects thus reducing the pressure on BPA’s limited capital availability.

The use of lease financing or other creative financial engineering that raise the cost of capital should be discouraged and only utilized as a last resort.

The Bonneville system is a regional asset and an integral part of the western electricity system. Its impact goes far beyond its BA footprint. BPA must support the continued reliability and vitality of the system focusing on those needs that are critical to keeping BPA an efficient, flexible, reliable power and transmission system.

IPR212 0047 -
Payne/State of Wshington Department of CommerceThis attachment is part of the comment from the State of Washington Department of Commerce, IPR212 0046. This was too large to upload in that comment.

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